Preheat your oven to 325°F (165°C). Place 4 ramekins or small oven-safe dishes in a baking dish.
In a mixing bowl, whisk together the eggs and sugar until well combined.
Heat the milk in a saucepan over medium heat until it starts to steam but not boil.
Slowly pour the hot milk into the egg mixture, whisking constantly to combine.
Stir in the vanilla extract.
Pour the custard mixture into the ramekins. Sprinkle a little ground nutmeg on top if desired.
Carefully pour hot water into the baking dish around the ramekins to create a water bath.
Bake in the preheated oven for about 30-35 minutes or until the custards are set but still slightly jiggly in the center.
Remove from the oven and let cool. Serve warm or chilled.
Enjoy!